Government of Vietnam Announces Financial Relief Measures for COVID-19

April 16, 2020

Government of Vietnam Announces Financial Relief Measures for COVID-19

On April 9, 2020, the Government of Vietnam passed Resolution No. 42/NQ-CP on measures to support those who are facing hardship due to the COVID-19 pandemic (“Resolution 42”).

Under Resolution 42, financial support will be given to employees and employers in difficult circumstances as follows:

(i) VND 1,800,000 (about USD 70) per month will be given to employees working under labor contracts who have had to agree with their employers (which, due to the COVID-19 pandemic, do not have sources of income to pay salaries) to suspend their contracts or take unpaid leave for a period of one month or more. The period for the support is based on the actual duration of the contract suspension or the amount of unpaid leave taken, calculated from April 1, 2020, but shall not exceed three months.

(ii) Employers facing financial difficulties that have paid at least 50% of salaries in advance to their employees during their suspension of work for the period from April to June 2020 will be given collateral-free, zero-interest loans by the Vietnam Bank for Social Policies. The loans will be equivalent to a maximum of 50% of the minimum regional wages applicable to each employee based on the actual time of salary payment, but not exceeding three months. The maximum term of the loans is 12 months. By law, if an employee is suspended from work due to an epidemic, he/she will be entitled to a wage for work suspension as agreed by the parties, but it must not be lower than the regional minimum wage stipulated by the Government.

(iii) VND 1,000,000 (about USD 43) per month will be given to employees whose labor contracts are terminated and are not eligible for unemployment insurance, and employees working without a labor contract who lose their jobs. The period for support will not exceed three months, calculated from April to June 2020.

(iv) If, due to the COVID-19 pandemic, an employer is forced to reduce its workforce by 50% or more (compared to its workforce at the time the pandemic was declared), both the employer and its employees will be permitted to suspend their contributions to the pension and survivor funds of the employees for a maximum of 12 months. A reduced workforce includes employees whose work has been suspended, whose labor contract performance has been postponed or who take unpaid leave.

For more information on Resolution 42, please contact us at [email protected].

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